Energy Market Review, Monday 19 February

Headlines for Monday, 19th February

The majority of power and gas contracts increased last week, with seasonal contracts recovering from the multi-month lows experienced the previous week. Commodity prices experienced mixed movements.

Day-ahead baseload power rose 2.5% to £49.2/MWh, with lower wind generation forecast for Monday (19 February). The day-ahead contract was relatively stable last week with just a £0.90/MWh difference between the highest and lowest price. Summer 18 power gained 1.5% to £43.1/MWh and the winter 18 contract lifted 1.2% to £48.8/MWh, following their gas counterparts.

Brent crude oil prices lost 4.1% to average $63.6/bl throughout the week. On Wednesday, Brent crude fell to a nine-week low of $62.4/bl. Continued concerns over rising US oil output and Baker Hughes data showing the US rig count was at a three-year high pushed prices lower.A

PI 2 coal prices continued to fall last week, dropping 1.4% to average $78.9/t. However, prices did experience a week-on-week gain, reaching $80.5/t on Friday, up from $77.0/t the previous Friday.

EU ETS carbon prices gained 7.4% to average €9.6/t last week.

Brent Crude Oil

Brent crude oil prices lost 4.1% to average $63.6/bl throughout the week. On Wednesday, Brent crude fell to a nine-week low of $62.4/bl. Continued concerns over rising US oil output and Baker Hughes data showing the US rig count was at a three-year high pushed prices lower. Additionally, many US oil refineries are shut for seasonal maintenance reducing demand for the commodity.

API 2 Coal

API 2 coal prices continued to fall last week, dropping 1.4% to average $78.9/t. However, prices did experience a week-on-week gain, reaching $80.5/t on Friday, up from $77.0/t the previous Friday. Coal prices moved lower early in the week, pressured by lower Asian demand. Prices climbed in the second half of the week after data showed ARA coal stocks dropped to a 14-month low and lower German renewables output led to higher coal-fired output.

EU ETS Carbon

EU ETS carbon prices gained 7.4% to average €9.6/t last week. Prices hit a six-year high of €9.8/t on Wednesday, amid heavy buying from speculators with expectations of increased demand from emitters preparing for 2017 compliance.

NBP Gas

Near-term

Most near-term gas contracts experienced gains last week. The only exception was the day-ahead contract which slipped 0.4% to 50.2p/th. Prices decreased throughout the week amid rising temperatures and lower gas demand for both power generation and residential heating. The month-ahead (March) contract rose 2.7% to 50.9p/th last week. The contract is now 2.1% higher than its level last month (49.8p/th).

Seasonal

All seasonal gas contracts climbed last week, recovering from the multi-month lows seen in the previous week, increasing 1.4% on average. Summer 18 gas lifted 1.9% to 42.2p/th and the winter 18 contract gained 0.8% to 49.8p/th.

Annual April 18

Annual April 18 gas rose 1.3% to 46.0p/th. The contract is now 4.4% below its price the same time last month (48.2p/th). However, it is 1.4% higher than the same time last year (45.4p/th).

Baseload Power

Near-term

All near-term baseload power contracts increased last week. Day-ahead baseload power rose 2.5% to £49.2/MWh, with lower wind generation forecast week-on-week. The day-ahead contract was relatively stable last week with just a £0.90/MWh difference between the highest and lowest price. The month-ahead (March) contract climbed 2.3% to £49.4/MWh. The contract is now 0.9% above its level a month ago (£48.9/MWh).

Seasonal

Most seasonal baseload power prices moved higher last week, after dropping to multi-month lows the previous week. Summer 18 power gained 1.5% to £43.1/MWh and the winter 18 contract lifted 1.2% to £48.8/MWh.

Annual April 18

The annual April 18 power contract went up 1.4% to £46.0/MWh. In comparison with the same period last month (£47.3/MWh), prices fell 2.9%. However, the value was 8.6% higher than the same time last year (£42.3/MWh).